Shareholders in Sydney Airport have voted in favour of a takeover bid led by IFM Investors and Global Infrastructure Partners that will see the business delist from the Australian Securities Exchange in a deal worth A$23.6 billion ($16.7 billion; €14.6 billion).
Despite the airport’s board unanimously recommending that shareholders back the takeover, 21 percent of shareholders by number did not vote in favour, representing a significant protest, while comfortably clearing the 50 percent of votes in favour required for approval. Ninety-six percent of the votes cast on 3 February were in favour, also well above the 75 percent threshold required of that measure for approval.
Some small shareholders did not support the takeover, with one, Joe Cambria, arguing that the share price was “artificially depressed” at the time of the bid and that Sydney Airport was a “fantastic asset in temporary distress” due to covid-19 travel restrictions imposed by the Australian federal government.
The vote was the final hurdle for the takeover bid to clear, following clearance from the Foreign Investment Review Board and a decision by the Australian Competition and Consumer Commission not to intervene, both in December.
The consortium known as Sydney Aviation Alliance will now take ownership of the airport after completing the largest all-cash takeover deal and one of the largest take-private transactions of any type in Australian history.
Sydney Aviation Alliance’s interest in a takeover became public in July 2021, when the airport’s board announced it had rejected an offer worth A$22.3 billion, before rejecting another A$22.8 billion offer weeks later.
The board finally agreed to a revised bid worth A$23.6 billion in November 2021, which will see shareholders receive a cash payment of A$8.75 per share. This represents a 50.6 percent premium to the closing price of A$5.81 on 2 July 2021, the day before SAA’s bid was announced.
According to the scheme booklet published in December, an Australian resident fixed unit trust known as the Sydney Aviation Alliance Australian Investment Trust (AIT) will hold a 35.99 percent stake in the airport. The units in the trust will be held 41.65 percent by the IFM Australian Infrastructure Fund, 20.84 percent by AustralianSuper, 20.84 percent by QSuper, 8.34 percent by the IFM Global Infrastructure Fund and 8.34 percent by Global Infrastructure Partners.
A further 34 percent stake will be held by Global Infrastructure Partners directly, with no individual client of GIP holding an interest of more than 4.5 percent. Another 15 percent stake will be held directly by the IFM Global Infrastructure Fund.
Finally, 15 percent will be held by UniSuper, which is rolling over a stake of the same size from the airport’s public share registry into the new private holding company.
AIT and UniSuper’s stakes combined will ensure that 51 percent of the holding company’s shares are owned by Australian investors, satisfying requirements set out by the country’s Airports Act.
Speaking at the scheme meeting ahead of the shareholder vote, Sydney Airport chairman David Gonski said: “I would like to emphasise that the board, in making its recommendation, assessed the proposal against the fundamental long-term value of Sydney Airport, not just the shorter-term challenges facing the airport as a result of covid-19.
“For example, the board did take into account the long-term nature of the airport concession; the strategic nature of the airport as a world class airport and one of Australia’s most important infrastructure assets, and the historical growth in the years prior to the covid-19 pandemic.
“However, after careful consideration of those factors, the Sydney Airport board took the view that the cash consideration of A$8.75 per security does fairly reflect the fundamental long-term value of the airport.”